Five Things Fintech FCs Know About PSR Safeguarding

There is a specific moment in most fintech FC interviews when a commercial FC candidate — experienced, articulate, technically strong — starts to lose the brief. It is not usually the question about VC board packs. It is not the IFRS 15 SaaS revenue recognition question. It is the question about safeguarding.

PSR safeguarding is the regulatory requirement that sits at the operational centre of every payment institution and e-money institution in the UK. It is completely unknown to FCs who have only ever worked in commercial or non-regulated environments. This piece sets out the five things that genuinely experienced fintech FCs have learned about safeguarding that the commercial market simply does not teach.

1. The Safeguarding Calculation Changes Every Day

Under Regulation 23 of the Payment Services Regulations 2017, every payment institution must safeguard relevant funds — the total of money received from payment service users but not yet paid to the payee or returned to the payer — either by holding them in a designated safeguarding account with an authorised credit institution (Method A) or by covering them with an insurance policy or bank guarantee (Method B).

The safeguarding requirement is not a fixed number. It changes daily with the volume of payments in transit. A payment institution processing high volumes of salary payments on a Thursday will have a materially larger safeguarding requirement on that day than it carries over a weekend. The FC at a payment institution produces the safeguarding calculation daily, reconciles it against the balance held in the designated safeguarding account, and escalates any shortfall immediately. At busy periods, this is a real-time discipline.

The commercial FC who has managed a cash reconciliation before has adjacent skills here but has never managed a daily regulatory compliance obligation with an immediate FCA notification consequence if the balance falls short. That urgency is qualitatively different from anything the commercial accounting environment produces.

2. A Safeguarding Shortfall Is Not a Cash Flow Problem

When the balance in a commercial business’s current account falls below expected levels, the FC calls the bank, reviews the cash position and plans accordingly. When the balance in a payment institution’s safeguarding account falls below the safeguarding requirement, the FCA’s safeguarding rules require the firm to notify the FCA and remediate the shortfall immediately. This is not a cash flow conversation. It is a regulatory breach with potential supervisory consequences.

Fintech FCs know this distinction instinctively. They have built the escalation protocols. They have managed the board notification process when a safeguarding shortfall occurs. They know which person in the organisation needs to be called at 7am and which situation justifies waking up the CEO. Commercial FCs learn this only by experiencing it — there is no accounting qualification module that covers payment institution safeguarding operations.

3. The FCA Publishes Safeguarding Guidance and Expects You to Have Read It

The FCA’s 2021 policy statement on safeguarding — PS21/19 — updated the expectations for how payment institutions and e-money institutions safeguard relevant funds, with specific requirements around annual safeguarding audits, governance and wind-down planning. The FCA’s policy statement is not light reading. It is forty pages of detailed regulatory expectations that every fintech FC at a payment institution is expected to have read and applied.

In a fintech FC interview, experienced candidates will reference PS21/19, the annual safeguarding audit and the wind-down planning requirements without prompting. Candidates from the commercial market often haven’t read it at all. The FCA treats the annual safeguarding audit as a board-level governance item. The FC who is not familiar with its requirements will struggle to manage the audit relationship confidently.

4. E-Money Own Funds Are Calculated Differently From MIPRU Capital

E-money institutions authorised under the Electronic Money Regulations 2011 must maintain own funds equal to the higher of £350,000 or 2% of the average outstanding e-money issued at the end of each calendar month, calculated over a six-month lookback period. This is a materially different calculation from the MIPRU capital resources requirement that applies to insurance intermediaries and smaller investment firms, and from the IFPRU K-factor requirements that apply to MiFID investment firms.

The fintech FC at an EMI builds this calculation monthly, tracks the outstanding e-money position across the lookback period and reports the own funds position and headroom to the SMF2 and board. The FC at a commercial business has never performed this calculation. The FC who has only ever worked at a payment institution under the PSR has never calculated own funds under the EMR. These are distinct, specific skills that transfer imperfectly even within the fintech space.

5. The Relationship Between Safeguarding and the CASS Rules Is Not Straightforward

Some fintech businesses hold both payment service user funds under the PSR safeguarding rules and investment client money under CASS 7. Where a fintech is both a payment institution and an MiFID-authorised investment firm — a combination that occurs at digital wealth managers, some robo-advisers and embedded finance platforms — the FC manages two parallel client money and client assets frameworks simultaneously: PSR safeguarding for the payments activity and CASS 7 for the investment activity.

The practical interaction between these two frameworks — how funds flow between the payment account and the investment account, how the daily reconciliations for each are sequenced, and how a shortfall in one affects the other — is understood by a small number of FCs who have actually managed this specific combination. Identifying them is one of the more interesting briefs we handle. See Fintech FC Recruitment, Investment Firm FC Recruitment, E-Money and Payments Regulation and Safeguarding at Payment and E-Money Firms.

The Wind-Down Plan: Finance Function Ownership

The FCA requires payment institutions and e-money institutions to maintain adequate financial resources to support an orderly wind-down. For most smaller fintech firms, the FC is the person who owns the wind-down plan — the documented assessment of the financial resources required to wind down the firm’s activities in an orderly manner, covering: the costs of the wind-down process itself; the safeguarding transfer costs of returning relevant funds to payment service users; and the capital buffer required throughout the wind-down period.

The wind-down plan is not a document that most fintech FCs enjoy producing. It requires modelling the firm’s costs under a scenario where revenue has stopped and the priority is an orderly exit rather than business continuity. But the FCA expects it to be current, credible and board-approved. The fintech FC who has never produced a wind-down plan and is asked to do so for the first time during an FCA supervisory review is in a significantly worse position than one who has maintained it as a live document.

See FCA Wind-Down Planning, Regulatory Capital and ICARA and the FCA’s own guidance on wind-down planning for payment firms for the full framework.

What This Means for Hiring Fintech FCs

The PSR safeguarding programme, the EMD own funds calculation, the wind-down plan and the CASS 7 interaction described above are all skills that develop only through direct employment at an FCA-regulated payment institution or e-money institution. A commercial FC from a SaaS business or a manufacturing firm, however strong their technical accounting and investor reporting credentials, has developed none of these capabilities.

The fintech FC brief is therefore one where candidate sourcing from the commercial market consistently fails at shortlist stage, regardless of how strong the CV looks on financial management fundamentals. Accountancy Capital’s fintech FC candidate network is built specifically from direct relationships with finance professionals who have worked within the PSR and EMR frameworks. See Fintech FC Recruitment, Finance Career in Fintech and FC at FCA-Regulated Firms.

For the salary premium that FCA-regulated fintech FC experience commands in the 2026 market, see London FC Salary Guide 2026 and UK FC Salary Guide 2026.

A practical note on interview process for fintech FC roles: the most reliable single-question test of genuine PSR safeguarding experience is to ask the candidate to describe the safeguarding calculation they produce and how they manage a shortfall. Candidates with genuine operational experience will answer with a specific methodology — the formula they use to derive the relevant funds figure, the frequency of the reconciliation, the escalation path for a shortfall. Candidates who have been adjacent to safeguarding but have not owned it will describe it at a conceptual level without the operational specificity. The distinction is immediately apparent in the answer.

The five areas of PSR safeguarding knowledge described above — the daily safeguarding calculation, the shortfall notification process, the FCA’s safeguarding guidance framework, the EMD own funds distinction and the CASS 7 interaction — are the baseline assessment criteria that Accountancy Capital applies to every fintech FC candidate we put forward at a payment institution or e-money institution. Candidates who can speak to all five with specific, operational examples from their own experience are in genuinely short supply relative to the demand from the UK’s growing fintech payments employer base.

The candidates who cannot are more common and more expensive to place correctly, because the gap between the CV impression and the regulatory capability is widest in this specific sub-market. Accountancy Capital’s fintech FC network is built specifically from direct professional relationships with finance professionals who have worked operationally within the PSR and EMR frameworks at FCA-authorised payment institutions and e-money institutions. Call 0204 553 8893 to brief a fintech FC search. ICAEW Fellow Founder Adrian Lawrence FCA — verify via ICAEW.